Check Inflation

Bini Dahal

For someone who enjoys an occasional treat of some Indian sweets, I frequent certain sweet shops a lot. But each time I visit, I get startled by the small portion I get for the price I pay. Not just sweets, even daily groceries have now become a luxury for us with their unexpected price rises. 

I remember studying inflation in the first year of my college. Concerned about having to remember long definitions, I would select the shortest ones. And the easiest definition of inflation went something like, ‘a rise in the general price level of key commodities’. Then, I could not grasp the issue of inflation well, but now I do.

It seems that Nepal’s current economy has fallen into a deep slump. According to the Current Macroeconomic and Financial Situation Report unveiled by the  Nepal Rastra Bank (NRB), the economy is suffering from rising inflation, deficits in the balance of payment (BOP), falling remittances, high level of dependency on imports and a very low foreign exchange reserve. The consumer price inflation now stands at 7.14 per cent as compared to just 3.03 per cent a year ago. 

Inflation is not something new for the country. We are so dependent on our neighbouring and other foreign countries that their problem becomes our own, thanks to the spillover effect. With post COVID-19 and the latest Ukraine-Russia conflict, we have come to acknowledge that our economy is dearly holding on to the rope.

 A rise in imported petroleum products such as petrol, diesel, aviation fuel and cooking gas alone means an increase in prices of every commodity. The repeated hike in transportation fares has led to a rise in prices of all goods and services.

While an individual’s income will remain as it is, the prices of basic commodities will continue to soar up to a point that survival becomes the most difficult. This is especially an issue for low-income people who need to divide their expenses very carefully. 

With the pandemic receding, everything is now recovering slowly. The country has started seeing more foreign tourists. But the tourism sector has not reached a point where it can carry a huge portion of the nation’s economic burden. While talking about other productive sectors, they are completely undeveloped and novice.

The economic crisis is demanding immediate attention on the part of the government authorities. 

Their role is vital in ensuring proper service delivery and monitoring the market. Not just the public sector, but the private sector should also play a key part in checking inflation. For the time being, their focus should shift from profitability towards carrying out social responsibilities. However, they are still scrambling for reviving their business.  

A time has emerged when survival is becoming continuously difficult for all. 

The year on the calendar might have changed but we cannot be excited or expectant of what lay in front of us. Right at this time, a pertinent question arises: are we really heading towards a newer and a better year? Or are we destined to continue with the current situation?